Article 29 Consequences of non-performance – Liquidated damages

29.1 Late delivery of Equipment. If Delivery of the Equipment occurs later than specified in the Time Schedule and provided such delay is neither the result of force majeure nor the result of circumstances for which the Purchaser is responsible, the Purchaser shall be entitled to liquidated damages in accordance with Contract Schedule I-1, unless it is evident that the Purchaser has suffered no loss due to the delay.

29.2 Late Take-Over. If Take-Over of the Plant occurs later than specified in the Time Schedule and provided such delay is neither the result of force majeure nor the result of circumstances for which the Purchaser is responsible, the Purchaser shall be entitled to liquidated damages in accordance with Contract Schedule I-2.

29.3 Cumulation of liquidated damages. The cumulated liquidated damages for delay set out in Article 29.1 and Article 29.2 hereof shall not exceed the percentage stated in Contract Schedule I-3.

29.4 Non-attainment of the Guaranteed Performance. If, notwithstanding the observance of the testing procedures contained in Annex 9, the Plant does not reach the Guaranteed Performance, but does reach the Minimum Performance Levels at the latest time for Taking-Over specified in the Time Schedule, provided this lack of performance is neither the result of force majeure nor the result of circumstances for which the Purchaser is responsible, the Purchaser shall be entitled to liquidated damages in accordance with Annex 1-C, to the extent that the Guaranteed Performance is not attained. Such liquidated damages shall not not exceed the maximum amount stated in Annex 1-C.

29.5 Suspension of performance. Each Party is entitled to suspend performance of its obligations under this Contract in the event the other Party fails to perform in a timely manner any material obligation under this Contract until the default is remedied, without prejudice to other remedies that may be available and subject to the following: a Party shall notify the other Party in writing of its intent to suspend and grant a final time period to the other Party to remedy the default, failing which the right of suspension may be exercised without further delay.

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Article 30 Contract termination

30.1 Termination for Supplier’s Default. The Purchaser shall be entitled to terminate this Contract in whole or in part in case:

  1. cumulated liquidated damages for delay exceed the maximum amount indicated in Contract Schedule I-3; or
  2. notwithstanding the observance of the testing procedures contained in Annex 9, the Plant fails to attain the Minimum Performance Levels at the latest time for Taking Over specified in the Time Schedule, provided this is neither the result of force majeure nor the result of circumstances for which the Purchaser is responsible; or
  3. the Supplier has failed to perform a substantial obligation under the Contract after having been served a notice of failure and make good by Purchaser within a reasonable period; or
  4. the Supplier becomes bankrupt or insolvent, goes into liquidation or any act is done or an event occurs that under applicable law has a similar effect to any of these events or acts, and the Supplier fails to provide, at the Purchaser’s request, an adequate security (e.g. bank guarantee, insurance company guarantee) for the fulfilment of its obligations under this Contract; or
  5. the Supplier gives or offers to give, directly or indirectly, to any person any bribe, gift, gratuity, commission or other thing of value as an inducement or reward for doing or forbearing to do any action in relation to this Contract.

30.2 Termination for Purchaser’s default. The Supplier shall be entitled to terminate this Contract in whole or in part in case:

  1. the Purchaser has failed to perform a substantial obligation under the Contract after having been served a notice of failure and make good by Supplier within a reasonable period; or
  2. the Purchaser is in breach of any of its payment obligations or of its obligation to provide a documentary credit (L/C) or a bank guarantee, where required in the Contract, and this breach continues longer than ninety (90) days, or such other period as the Parties may agree; or
  3. the Purchaser becomes bankrupt or insolvent, goes into liquidation or any act is done or event occurs that under applicable law has a similar effect to any of these events or acts, and the Purchaser fails to provide, at the Supplier’s request, an adequate security (e.g. bank guarantee, insurance company guarantee) for the fulfilment of its obligations under this Contract.

30.3 Termination in case of lasting force majeure. Either Party is entitled to terminate this Contract in case of force majeure lasting for more than six (6) months and having the effect of substantially depriving either or both of the Parties of what they were reasonably entitled to expect under this Contract, as specified in Article 33.7.

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30.4 Effects of termination on obligations already performed. Except as provided under Article 30.5 hereunder, termination of this Contract shall not affect obligations which have already been performed at the time when the termination notice is given nor the right to receive payment for obligations already performed.

30.5 Supplier’s obligation in case of non-attainment of the Minimum Performance Levels. In case of termination pursuant to Article 30.1 (b), the Purchaser may require the Supplier at its own cost to dismantle and remove the Equipment from the Site and to pay back the Contract Price, in as far as received, to the Purchaser.

30.6 Compensation for the loss suffered. In case of termination for default of the other Party under paragraphs 30.1 and 30.2 the terminating party will be entitled to compensation for the loss it has suffered as a direct consequence of the default justifying termination. Except where the default justifying the Contract termination amounts to fraud or wilful misconduct, the total liability for damages (including possible liquidated damages) shall be limited to a maximum amount equivalent to ........% of the Contract Price.

30.7 Sole remedy. Contract termination by a Party is admitted only in the cases specified in this Article 30.

Article 31 Defects in the Plant after Taking Over

31.1 Warranty. The Supplier shall make good, to the extent defined in this Article, any defect or non-conformity in the Plant (hereafter referred to as a Defect), arising from faulty design, materials or workmanship.
If the Plant is found to have a Defect that can be assumed to be present also in some other portion of the Plant, the Supplier shall investigate whether such further Defect is present, and shall make good any further Defects found. Failure to attain the Guaranteed Performance shall not as such be regarded as Defect coming under the provisions of this Article, but shall be dealt with under Article 29.4 and 30.1.

31.2 Defects liability period. Unless otherwise specified in the Contract, the liability of the Supplier under the provisions of Article 31.1 applies only to Defects that appear within a period of one (1) year from the date of Taking Over of the Plant or eighteen 18 months from the date of delivery of the Equipment, whichever occurs first.

31.3 Conditions for liability for Defects. The liability of the Supplier does not extend to Defects caused by circumstances for which the Supplier is not responsible, such as but not limited to improper or insufficient maintenance or incorrect operation, improper operationing conditions not in accordance with the Contract, failure to store the Equipment or other materials appropriately, alterations or repairs made without the Supplier’s written permission, repairs carried out improperly by the Purchaser, or normal wear and tear.

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31.4 Notification of Defects. Defects as covered by Article 31.1 shall be notified to the Supplier in writing without undue delay after the Defects have appeared, and in any event no later than fourteen (14) days after the expiry of the defects liability period. Such notification shall include a description of the type and extent of the Defect.
If the Purchaser has not notified the Supplier of a Defect as required by the provisions of this Article, it forfeits its right to have the Defect made good in accordance with Article 31.1.

31.5 Making good of Defects. Upon receipt from the Purchaser of a notification of a Defect of the type defined in Article 31.1, the Supplier shall apply with such speed as the circumstances require, due and proper measures to make good the Defect.

31.6 Immediate action in connection with risk of damage. If a Defect as defined in Article 31.1 appears, requiring immediate action due to the risk of resultant damage, and if the Supplier cannot make immediately good the Defect, the Purchaser is entitled and obliged to apply all necessary measures to prevent or limit damage.

31.7 Liability for replaced or repaired parts. Parts replaced or repaired under the provisions of Article 31.1 are subject to the same warranty from the Supplier, and under the same conditions as apply for the rest of the Plant, for a period of one (1) year after such replacement or repair has been effected. The defects liability period for the rest of the Plant is extended only by the time during which the Plant has been out of operation as a result of a Defect covered by the provisions of Article 31.1. Nothing contained in this Article 31.7 shall however extend the defects liability period by a period beyond two (2) years after Taking Over.

31.8 Property in replaced defective parts. Defective parts which have been replaced shall be made available to the Supplier without cost and shall become the property of the Supplier.

31.9 Final period for making good Defects. If the Supplier has not made good a Defect within a time that can be regarded as reasonable with respect to the type and extent of the Defect and to other circumstances, the Purchaser shall determine a reasonable final period within which the Supplier shall have made good the Defect.

31.10 Failure to make good a Defect. If the Supplier has not made good a Defect within the final period determined by the Purchaser in accordance with Article 31.9, the Purchaser is entitled, at its option, either to apply the measures required to make good the Defect at the Supplier’s cost, or to receive a reasonable deduction from the Contract Price. If the Defect is so substantial as to significantly deprive the Purchaser of the benefit of the Contract, the Purchaser may terminate the Contract under Article 30.1(c).

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31.11 Unjustified notification of Defects. If the Purchaser has notified a Defect as described in Article 31, and if it is found that there is no Defect for which the Supplier is liable, the Supplier is entitled to compensation for the costs which it has thereby incurred.

Article 32 Limitation of liability

32.1 Sole reason for termination. The remedies mentioned in Articles 29 and 30 shall be the Purchaser’s sole remedies for Supplier’s delay and failure to reach the Guaranteed Performance.
The remedies mentioned in Article 31 shall be the Purchaser’s sole remedies for Defects in the Plant after Taking Over.

32.2 Indirect or consequential damages. Neither Party shall be liable to the other Party for any indirect and consequential damages, such as but not limited to loss of profit, production, or contracts.

32.3 Fraud and wilful misconduct. The limitation of liability under this Article shall not apply in case of fraud or wilful misconduct.